RTTNews - Japan's corporate goods price index or the prices paid by producers dropped at a record pace in July, the Bank of Japan said Wednesday.

The corporate goods prices slipped 8.5% year-on-year in July, quicker than the 6.7% fall in the preceding month. Moreover, this was the seventh consecutive month of decline.

Month-on-month, the producer prices climbed 0.4% in July, reversing ten consecutive months of falls. In June, prices slipped 0.4%. Economists expected the index to have remained unchanged from the previous month.

The monthly increase was led by petroleum and coal products, which showed a price increase of 7.5%, adding 0.39 percentage points to growth. This was followed by utilities, which increased 2.3% and added 0.11 percentage points. Chemical and related products climbed 0.7% and added 0.05 percentage points.

At the same time, iron and steel made the biggest negative contribution to the index, falling 2.3% and subtracting 0.13 percentage points from the index. Information&communications equipment, transport equipment, general machinery and equipment, textile products, pulp and paper products as also processed foodstuffs deducted 0.01 percentage points each from the index.

Meanwhile, export prices fell 15.3% year-on-year in July on a yen basis, faster than the 13% drop in the preceding month. Import prices dropped 33.3% compared to a 32.3% fall in June.

In recent month, other price indices have shown deflationary trends. In June, consumer prices and corporate service price showed record declines. However, the Bank of Japan Governor Maasaki Shirakawa in a speech Tuesday said he did not see a risk of a deflationary spiral now, but called for close and careful monitoring of trends.

The Bank of Japan in its monetary policy meeting Tuesday retained its key interest rate unchanged at 0.1% and maintained its cautious assessment about the economy. Moreover, the Cabinet Office left its economic assessment unchanged in August, after raising it for three consecutive months.

For comments and feedback: contact editorial@rttnews.com